The Chegg Company estimates that the factory overhead for the year will be $1,25
ID: 2567322 • Letter: T
Question
The Chegg Company estimates that the factory overhead for the year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, estimated to be 50,000 hours. The total machine hours for the year were 54,300. The actual overhead for the year were $1,348,800.a. Determine total factory overhead amount applied. Answer: $1,357,500
b. Calculate the over or under applied amount for the year. Answer: $1,357,500-$1,348,800=$8,700 ??
c. Prepare the journal entry to close Factory Overhead into Cost of Goods Sold.
Is the answer to B “$8700 overapplied”? If overapplied how does that differ in journal entry, question C, from underapllied? The Chegg Company estimates that the factory overhead for the year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, estimated to be 50,000 hours. The total machine hours for the year were 54,300. The actual overhead for the year were $1,348,800.
a. Determine total factory overhead amount applied. Answer: $1,357,500
b. Calculate the over or under applied amount for the year. Answer: $1,357,500-$1,348,800=$8,700 ??
c. Prepare the journal entry to close Factory Overhead into Cost of Goods Sold.
Is the answer to B “$8700 overapplied”? If overapplied how does that differ in journal entry, question C, from underapllied?
a. Determine total factory overhead amount applied. Answer: $1,357,500
b. Calculate the over or under applied amount for the year. Answer: $1,357,500-$1,348,800=$8,700 ??
c. Prepare the journal entry to close Factory Overhead into Cost of Goods Sold.
Is the answer to B “$8700 overapplied”? If overapplied how does that differ in journal entry, question C, from underapllied?
Explanation / Answer
Ans:
Predetermined overhead rate= $1250000/50000
= $25 per machine hour
a.Applied factory overhead=54300*$25=$1357500
b. Over applied overhead= $1357500-$1348800=$8700
c. Journal entry
Dr. Factory overhead $8700
Cr. Cost of Goods sold $8700